Cryptocurrency has found support from all across the world. Some showed resistance while others have started usage of the blockchain technology to the fullest, in different industries. Russia belongs to the latter category, where it has wholeheartedly embraced cryptocurrencies. Cryptocurrency is the main source of income for around 12% of crypto users speaking Russian, according to a new survey. More than 90% of the respondents say that they want to use digital coins as a means of payment, and even a quarter of those being interviewed are doing that already. Around 40% of the participants view cryptos like bitcoin as a long-term investment. They have no intentions to sell their cryptocurrency holdings in the near future.
Last October, Russian President Vladimir Putin has instructed the Bank of Russia and the government to develop regulations in regards to cryptocurrencies, mining and initial coin offering and to make appropriate changes to the legislation before July 1, 2018. The most startling announcement was Putin’s intention to build a digitized version of the ruble called ‘CryptoRuble’, which changed the scenario drastically and officially proved the acceptance of digital currencies in Russia.
Being an early adopter of cryptocurrencies, with quite a large flourishing crypto community, Russia has been actively tackling the regulatory issues revolving around cryptocurrencies and the FinTech sector, as of recently. Fears revolving around money laundering, tax evasion and terrorist financing through the use of cryptocurrencies have led the Russian president Vladimir Putin to sign numerous orders with clear guidelines regarding the future development of financial technology,he gave the Central bank and the government a deadline until July of 2018, which is already over, and talks are going on amendment of the current legislation and determining the status of distributed ledger technology(DLT), cryptocurrencies, tokens, and smart contracts.
According to the new orders, legislative changes are even addressing cryptocurrency mining, its registration, regulation, and taxation, making the legal treatment of ICOs analogous to IPOs. This might result in the creation of a single payment space for the member states of the Eurasian Economic Union with the use of new financial technologies. This announcement is a big proof why the future of cryptocurrencies in Russia stands bright and accomplished.
In light of the meeting in October, Putin ordered the issue of the CryptoRuble- a national cryptocurrency which is intended to be exchangeable with the ruble on a 1:1 ratio. Unlike the traditional cryptocurrencies, it cannot be mined and will be issued by the central bank exclusively. This approach is uniquely and entirely Russian and is based on many years of careful observation about how cryptocurrencies are affecting other countries.
It aims to sacrifice some economic freedoms for government control while including the technology’s greatest advantages. It is an immutable ledger that would make citizen cash flows transparent to the government and help stem fraud and corruption while tearing down barriers between systems plagued with middlemen and centralization.CryptoRuble income would be taxed at 13% for the people who cannot provide a legitimate source for it, which is an attempt at fighting corruption but also a way to profit from it.
A senior Russian politician has predicted an illustrious outlook for cryptocurrency powered tourism in Russia.
MP Igor Fomin: the head of the tourism for the parliament’s Council Committee predicts that crypto-tourism developments would begin in earnest once the State Duma - the Russian parliament, finalizes a set of long-awaited cryptocurrency-related legislation. A significant yet small number of Russian tourist-centered industries, such as hotels, bars, travel agencies, and airlines started accepting crypto-payment during the recent World Cup – and many are keen to kick on from these beginnings. Hence the probability is more that the crypto market enters the tourism industry as well, in the future, maybe by 2019 or so.
Russia’s creativity with cryptos has been evident in other public sectors, as well, with the exploration of Moscowcoin, which is intended to implement blockchain technology in Moscow’s metropolitan services. The creation of a city coin could have wide applicability, could improve access to resident-facing web portals and would lead to the creation of new ones.
Moscowcoin could be used by the residents of Moscow on the ‘Active citizen’ portal - a project initiated by the Moscow government in the year,2014 as a venue for holding open electronic referendums. The platform which is available via an app for iOS, Windows and Android smartphones, already engages 1,310,191 users who have conducted around 1,700 votes.
Citizens who are active use the weekly platform to discuss critical city topics, like transport, health, and education with Moscow’s mayor and government, while earning points that can be used for city services like excursions, parking fees, museum and theaters tickets. The creation of further tokens targeting similar city services will complement existing reward programs and promote wider circulation.
Moscowcoin has been backed by eminent public sector representatives, such as Vladimir Efimov, the head of the Moscow dept. of economic policy and development, Sergei Gorkov- the chairman of the state-owned Vnesheconombank (VEB) and Natalia Sergunina- the Deputy Mayor of Moscow on economic policy and property-land relations.
As Russia is one of the major oil producing nations, they might introduce a decentralized currency allowing anonymous transactions along with blockchain technology support to facilitate oil contracts,it may be the ideal tool to allow the oil-producing trio to turn their back on the greenback. Instead of using various national currencies, cryptocurrencies provide a common currency for countries seeking to avoid using the ruble. They are also flexible and universal, easily convertible back to national currencies. Moscow is also facing US sanctions- penalties which are proving effective since it is dependent on the US dollar to sell their crude.
Several large Russian banks have expressed their interest in working with the cryptocurrency industry and blockchain sector during a closed-door meeting held at the Moscow Exchange, recently. This makes the probability of banks like Sberbank, Alfa-Bank, VTB, etc to start working with crypto by 2019 or so. (Future of cryptocurrencies in Russia in 2019)
Singapore-based cryptocurrency exchange Huobi has joined Russia’s VEB (Vnesheconom Bank) Innovation Fund to share notes on crypto regulation and to promote local innovations in the global market scenario. One of the main goals is to draw on the crypto regulation experience gained by Huobi and to apply it in Russia, esp for adjusting the legal framework on digital assets.VEB Innovations CEO Vladimir Demin explains that Huobi expertise will help create "a legal basis that could compete with current promising jurisdictions."
Regardless of sanctions, increased oversight, or more efficient financial tools, Russia wants cryptocurrency because the world wants it and it can enable the Russians to lead a better life, without the intrusion of any third party. Politics, finance, and the citizenry of Russia are gradually moving towards blockchain-based infrastructure. For Russia especially, blockchain must be a compromise between autonomy and control, which is already taken care of by the president.
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